Section 404 of Clarity Act Restricts Crypto Yield Products, Could Spark New 'Yield-as-Service' Market

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According to STBL Chief Compliance Officer Joe Vollono, Section 404 of the proposed Digital Asset Market Clarity Act could reshape how crypto yield products function in the U.S., with restrictions on passive hold-to-earn models potentially spurring a new institutional-grade "yield-as-service" economy on May 25. The provision would prevent platforms from offering rewards solely based on digital asset ownership, disrupting common passive yield products. However, Vollono argues the restrictions could instead accelerate development of AI-powered treasury systems, tokenized lending markets, and collateral management tools that generate compliant returns through active participation rather than simple deposits. The bill has gained momentum after Senator Cynthia Lummis publicly urged lawmakers to advance the legislation.
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